Appeal from Superior Court of King County. Docket No: 94-2-01940-6. Date filed: 03/19/96. Judge signing: Hon. Charles V. Johnson.
Authored by Faye C. Kennedy. Concurring: Mary K. Becker, Ronald E. Cox.
The opinion of the court was delivered by: Kennedy
KENNEDY, A.C.J. -- Todd Shrewsbury and Lance Pollard appeal the trial court's order awarding attorney fees to Waheed Sultani under Rule 7.3 of the Mandatory Arbitration Rules. The appellants contend that the fee award was erroneous under the facts of this case because neither was a party who failed to improve his position on the trial de novo. We agree and reverse the trial court's judgment in favor of Sultani. Because our holding is dispositive of this appeal, we need not reach the appellants' additional argument that Shrewsbury, who did not appeal the arbitration award, was not subject to MAR 7.3.
On the morning of January 25, 1991, Waheed Sultani was involved in a three car accident with David Leuthy and Alan Gough. While Sultani was stopped at a red light, he was rear-ended by Leuthy. Gough, who had been following Leuthy, then rear-ended Leuthy, forcing his car once again into Sultani. Sultani sustained personal injuries as a result of the accident. Less than two months later, on March 16, 1991, Sultani was again involved in a three car accident, this time with Lance Pollard and Todd Shrewsbury. When Sultani came to a complete stop for traffic on Interstate 5, he was rear-ended by Pollard. Shrewsbury, who had been driving behind Pollard, also failed to stop and struck Pollard from behind, forcing his car once again into Sultani. Sultani sustained additional personal injuries as a result of this accident. Approximately three years later, Sultani brought a single lawsuit against Leuthy, Gough, Pollard, and Shrewsbury for personal injuries and damages sustained as a result of the accidents.
The matter proceeded to mandatory arbitration under RCW 7.06. On April 14, 1995, the arbitrator awarded Sultani $38,535.20 against the four defendants jointly and severally. Following the arbitration, Pollard filed a request for trial de novo under MAR 7.1. Neither Leuthy nor Shrewsbury filed similar requests, and Gough failed to appear. At the Conclusion of the trial de novo, the jury found that the defendants' negligence was the proximate cause of Sultani's injuries, and awarded Sultani $55,250 in damages. The damages were apportioned among the defendants based on percentage of fault as follows: Leuthy: $32,873.75; Gough: $14,088.75; Shrewsbury: $4,558.13; Pollard: $3,729.37.
Noting that he had improved his position at trial, Sultani sought an award of attorney fees and costs under MAR 7.3. The trial court granted Sultani's request, ruling that Leuthy, Pollard, and Shrewsbury were jointly and severally liable for $28,000 in attorney fees and $3,286.91 in costs. The court subsequently denied the defendants' motion for reconsideration, and this timely appeal followed.
The appellants contend that the trial court erred in awarding Sultani attorney fees under MAR 7.3, arguing that neither was a party who failed to improve his position on the trial de novo within the meaning the rule. Sultani responds that the fee award was proper because, given the fact that his damages increased by nearly $17,000 following the trial de novo, the overall position of the four defendants did not improve, but instead worsened "drastically."
In Washington, attorney fees may be recovered only when authorized by statute, a recognized ground of equity, or private agreement of the parties. Perkins Coie v. Williams, 84 Wash. App. 733, 742-43, 929 P.2d 1215 (1997); Christie-Lambert Van & Storage Co. v. McLeod, 39 Wash. App. 298, 301, 693 P.2d 161 (1984). MAR 7.3 provides for the award of attorney fees in an appeal from a mandatory arbitration award under certain circumstances. The rule provides in pertinent part: "The court shall assess costs and reasonable attorney fees against a party who appeals the award and fails to improve the party's position on the trial de novo." MAR 7.3. See also RCW 7.06.060. By providing for the award of attorney fees, MAR 7.3 serves the goal of discouraging meritless appeals, thereby alleviating court congestion and reducing delay in hearing civil cases. Perkins Coie, 84 Wash. App. at 737-38; Fernandes v. Mockridge, 75 Wash. App. 207, 211-12, 877 P.2d 719 (1994), review denied, 126 Wash. 2d 1005 (1995); Christie-Lambert, 39 Wash. App. at 302-03.
Both parties rely on Christie-Lambert in support of their arguments on appeal. In Christie-Lambert, the plaintiff brought an action against an attorney and his client for services rendered on the unauthorized, but good faith request of the attorney on behalf of the client. The case proceeded to mandatory arbitration, at the Conclusion of which the arbitrator awarded the plaintiff $961.72 against the client and $3,045.42 against the attorney. Although the attorney had asserted a cross-claim against the client, the arbitrator refused to rule on the claim because the client had not been properly served. The attorney thereafter requested a trial de novo under MAR 7.1. At the Conclusion of the trial, the court awarded the plaintiff $928.18 against the client and $3,090.96 against the attorney. The court also awarded the attorney $2.090.96 against the client on his cross-claim and awarded the client $1,000 against the attorney. The trial court denied the plaintiff's request for an award of attorney fees under MAR 7.3, finding that the attorney had improved his overall position on the trial de novo. 39 Wash. App. at 300-01.
This court reversed the denial of the fee award. Although the attorney had improved his overall position on the trial de novo based on the cross-claim that was served after the arbitration, this court concluded that he had not improved his position with respect to the claim that had been arbitrated.
The interpretation of RCW 7.06.060 and MAR 7.3 that will give effect to the provision's purpose to deter meritless appeals and the act's purpose to favor arbitration in certain cases as a means of reducing court congestion is that costs and attorney fees shall be assessed against an appellant from a mandatory arbitration award who does not improve his position in the trial de novo as to a party whose claim was arbitrated. Interpreting RCW 7.06.060 and MAR 7.3 as not authorizing an attorney fee award where an appellant improves his overall position in the trial de novo solely because of a new claim brought for the first time at trial, as [the attorney] argues, would be counter to the statutory purpose of deterring meritless appeals from mandatory arbitration awards. In fact, such an interpretation would reward bringing a new claim in a trial de novo after the arbitration.
Moreover, it is inherently unfair to deny an attorney fee award to a party that has borne the cost of mandatory arbitration and a trial de novo without a change in results where the denial is based upon the appellant's improving his overall position in the trial de novo solely because of a new claim brought for the first time on appeal. This is particularly so ...